One of the biggest and perhaps most under reported events in the gold spectrum is very close to completion as on Oct. 11, the Accounting and Auditing Organisation for Islamic Financial
Institutions (AAOIFI) announced the primary draft that would allow for gold ownership by Muslims under the stricture of Sharia Law.
Worldwide there are around 1.6 billion Muslims, many of which follow Sharia Law in their cultural and financial lifestyles. And for centuries gold ownership was limited to both jewelry and currency, as any investment in the precious metal carried the potential of earning interest above the value of the metal, especially in areas such as futures and other paper gold markets.
But now the AAOIFI has laid out new guidelines that will become the standard under Sharia Law, and are expected to become fully functional by the end of 2016. And with this new opportunity opening up for a significant portion of the Islamic world, expectations are that both the gold price and demand could skyrocket as nearly 25% of the world's population would have access to gold ownership and investment for the first time.
The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) plans to finalize several new standards by the end of the year, as the standard-setting body works through a revamp of its guidance for the $2 trillion industry.
Bahrain-based AAOIFI has published a draft sharia standard for gold-based products with a one month consultation period ending Nov. 9, the industry body said in a statement. The project was started last year by the World Gold Council, a London-based market development body.
AAOIFI issues guidelines that are followed wholly or in part by Islamic financial institutions globally, a sector that has grown fast but remains fragmented across its core centers in the Middle East and Southeast Asia. - Reuters